No disallowance under Rule 8D(2)(ii) r.w. Section 14A if Investment were out of Interest Free Funds

Milind Pralhad Bhandarkar Vs DCIT (ITAT Pune) The issue under consideration is whether CIT(A) is correct in confirming the disallowance made by the Assessing Officer u/s.14A read with Rule 8D(2) of the Income Tax Rules, 1962? ITAT states that, the Hon’ble Bombay High Court in the case of Commissioner of Income Tax Vs. HDFC Bank Ltd. held that “it would be presumed that the investment made by the assessee would be out of interest free funds available with the assessee.” In the present case as discussed above, the assessee’s own funds were more than the investment made. Therefore...